Bendistillery Inc. helped one of Oregon’s newer distillers with production and formulation of its flavored vodkas for about four years, and now, Northwest Natural Spirits LLC alleges, Bendistillery is using that formula in its Crater Lake berry-flavored vodka.

“This year, Bendistillery appears to be using a different formulation that changes the taste and appearance in a way that makes it very similar to the Wild Roots product,” said attorney Gabe Weaver, a partner at Ball Janik in Portland who represents Northwest Natural, maker of Wild Roots Spirits.

Northwest Natural filed an arbitration demand last week with the Arbitration Service of Portland Inc., Weaver said.

Northwest Natural is seeking damages over Bendistillery’s sales since July and an injunction to stop the marketing and selling of Crater Lake “northwest berry” flavored vodka.

Bendistillery CEO Alan Dietrich said he was familiar with Wild Roots’ founder Chris Joseph’s position, but he hadn’t yet seen a copy of the arbitration demand. Northwest Natural contracted with Bendistillery, which has a facility in Tumalo, for production from 2012 to 2016.

“I will say we feel we have abided by both the spirit and the letter of our agreement,” Dietrich said. “We feel we’ve done everything right.”

Wild Roots, which has a tasting room in Portland but filters, infuses and bottles its vodka in Sisters, has seen rapid growth over the past three years, The Bulletin reported in August. Wild Roots’ sales at Oregon liquor stores grew from 1,207 cases in fiscal year 2015 to 4,068 cases in fiscal year 2017, according to the Oregon Liquor Control Commission.

Most of the company’s sales are in Oregon.

Arbitration proceedings are private, and Weaver said he’s not sure why Northwest Natural decided to notify news outlets of its dispute with Bendistillery. He said Joseph, who was traveling and not available for comment, tried to resolve his concerns informally with Dietrich before turning to arbitration. The contract production agreement between the two companies requires any dispute to be resolved in arbitration rather than in court, Weaver said.

Northwest Natural continues to buy raw vodka from a third party, but the exact source is confidential, said Jeff Mazer, chief financial officer.

Crater Lake’s “northwest berry” is a seasonal offering that changes from year to year, Dietrich said. “We did the same product a year ago, and they didn’t have a problem with it,” he said.

Last year was the first time Crater Lake offered its “northwest berry” flavor, which comes from a mix of available fruits, and at that time it was rose-colored. This year, the berry flavor is dark purple, the same color as several of Wild Roots’ berry flavors. Among Wild Roots’ flavored vodkas are marionberry, raspberry, cranberry and cherry.

“We’ve got a lot more color in 2017 than we did in 2016,” Dietrich said, but he maintains that color was achieved without using Wild Roots’ intellectual property.

There are a lot of fruit-flavored vodkas on the market, Weaver acknowledged, but he said there are proprietary aspects to Wild Roots’ formulation. Expert witnesses will show that Bendistillery is relying on key aspects of that formula, he said.

— Reporter: 541-617-7860, kmclaughlin@bendbulletin.com